8 unchanged sentences
To manage its exposure to variable interest rates in a cost-efficient manner, the Company enters into interest rate swaps in which the Company agrees to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount.
−Removed: The Company entered into an interest rate swap agreement to fix the interest rate on an initial aggregate amount of $80.0 million, which is 53.0% of the outstanding debt balance as of December 31, 2020 thereby reducing exposure to interest rate changes.
−Removed: Interest rate changes affect the fair market value of such debt but do not impact earnings or cash flows.
−Removed: Conversely, for variable rate debt, interest rate changes generally do not affect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant.
−Removed: The interest on the Term Loan Facility is variable and is comprised of 1) an applicable margin of either (i) 5.00% for base rate loans or (ii) 6.00% for LIBOR loans, and 2) LIBOR as quoted two business days prior to the commencement of an interest period provided that LIBOR at no time falls below 1.00%.
−Removed: At December 31, 2020, the interest rate swap agreement was not designated as a hedging instrument;
−Removed: therefore, it has been marked-to-market and the fair value recorded in the Consolidated Balance Sheets with the offsetting gain or loss recorded in interest and other expense in our Consolidated Statements of Operations.
−Removed: The interest rate swap agreement is more fully described in Note 6, Fair Value Measurement.
+Added: The Company entered into an interest rate swap agreement to fix the interest rate on an initial aggregate amount of $73.1 million, which is 50% of the outstanding Term Loan Facility as of December 31, 2021 thereby reducing exposure to interest rate changes.
+Added: A change in our variable interest rate of 100 basis points for a full twelve-month period would have an approximate $1.0 million impact on interest expense assuming approximately 50% of our average fiscal 2021 variable-rate term loan debt had not been hedged via an interest rate swap agreement.
+Added: In connection with the transition away from the use of the London interbank offered rate (LIBOR) as an interest rate benchmark, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that for U.S.
+Added: dollar LIBOR, the cessation date has been deferred to June 30, 2023 for the most commonly used tenors (overnight and one, three, six and 12 months).
+Added: Prior to the USD LIBOR ceasing to be published or no longer represented, we will work with our credit lending banks and expect to come to an agreement to replace the benchmark rate on our floating rate debt to be in line with the industry recommended benchmark replacement, which is likely the Secured Overnight Financing Rate (SOFR) plus a spread adjustment.
+Added: Additionally, with respect to our interest rate swaps, we are managing the transition from LIBOR based on industry-wide LIBOR reform efforts, including the LIBOR protocols issued by the International Swaps and Derivatives Association.
+Added: We are in the process of managing the transition, and any financial impact will be accounted for under Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848):
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting .
Foreign Currency Risk
6 unchanged sentences
We do not hold or issue foreign exchange options or forward contracts for trading purposes.
−Removed: Outstanding foreign currency forward exchange contracts at December 31, 2020 are more fully described in Note 6, Fair Value Measurement.
+Added: Outstanding foreign currency forward exchange contracts at December 31, 2021 are more fully described in Note 6, Fair Value Measurement, to our consolidated financial statements in Item 8 in this Annual Report on Form 10-K.
At December 31, 2021 and 2020, the potential reduction in earnings from a hypothetical 10% adverse change in quoted foreign currency spot rates applied to foreign currency sensitive instruments would have been immaterial.
14 unchanged sentences
Inflation potentially affects us in two principal ways.
−Removed: First, borrowings under our revolving credit facility is tied to prevailing short-term interest rates that may change as a result of inflation rates, translating into changes in interest expense.
+Added: First, borrowings under our revolving credit facility are tied to prevailing short-term interest rates that may change as a result of inflation rates, translating into changes in interest expense.
Second, general inflation can impact material purchases, labor, and pension liabilities.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.